Schools, cities may propose tax hikes

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Schools, cities may propose tax hikes
By Randy Ludlow

THE COLUMBUS DISPATCH


With the state preparing to whack about $8 billion from its recession-ravaged budget, something - or someone - has to give.

And those likely to be asked to do the giving are local taxpayers.

Gov.-elect John Kasich resolves to balance the state budget without tax increases. But cuts in state funding for schools and local governments are expected to result in a trickledown of tax-hike issues to local ballots.

Property-tax bills are arriving, and Ohioans could see a flurry of requests in the second half of 2011 to increase the bottom line of those tax statements to offset cuts in state aid, officials say.

School officials worry they could confront up to a 20percent cut in state funding over two years beginning July 1. At least a 10 percent reduction, some say, appears a near certainty.

Like the state, school districts and governments are required to live within the money available.

"There's no choice," said Rob Delane, deputy executive director of the Ohio School Boards Association. "Schools are going to have to cut money to stay within budget or will have to go to local voters for more money."

State cuts in K-12 funding will be felt the hardest in rural and property-poor districts that receive most of their money from the state, he said. Reductions will be more tolerable in wealthier districts that receive smaller amounts of state aid and already rely more on local taxpayers.

For example, in generally affluent Bexley, where homeowners pay $1,661 in property taxes for each $100,000 of home value, state aid totals $4.2 million, or about 14percent of the district's budget. In the largely rural Westfall district in Pickaway County, homeowners pay $824 per $100,000 value, and state aid of about $7.8 million accounts for about 60 percent of the district's operating budget.

School districts might ask voters to make the call on paying higher taxes or facing cuts that could include fewer teachers, less busing and higher out-of-pocket expenses for parents.

But it remains a bad time to be asking for more, Delane said. "The economy is still hurting people too much. They want to support their schools, but it's just an awful time to be asking. It's not going to be easy to pass requests for new money."

Requests for more money would not focus solely on property taxes. Districts with income taxes could ask voters to increase rates, and districts without income taxes might ask voters to impose them.

In November, tax-leery voters approved 51percent of the school levies on the ballot. That is the lowest approval percentage since 2004.

The Ohio Municipal League cautions that state cuts in local-government funding principally will harm public safety because police forces and fire departments typically account for the biggest chunk of city and village spending.

Cities and villages could be on the ballot later this year asking for money to replace lost state aid.

"The consequence is you are just pushing the tax burden down to the local level," said John Mahoney, the league's deputy director.

Cuts would particularly harm smaller communities without income taxes and cities of more than 30,000 residents, he said.

Municipalities, and other entities such as schools, face higher costs at a time when tax revenue is depressed, Mahoney noted.

State support for cities has been dwindling for a decade. Columbus received almost $51 million from the state in 2001; the annual sum declined over the years to $40.3million in 2010.

Potential state cuts also worry advocates for the developmentally disabled and mentally ill. Some also fear cutbacks in Medicaid for the poor and disabled, cash assistance and food stamps.